Yesterday I participated in a #NextChat for SHRM that was hosted by the legislative team of SHRM. We talked about a lot of issues, and believe me, there are a lot of issues that HR pros think should be addressed with Congress. One of the areas discussed is the WorkFlex in the 21st Century Act that I have written about all week. I wanted to discuss the future prospects in this post.
What are the incentives to pass this bill?
After having read the information provided to me, I talked to Lisa Horn, the Director of Congressional Affairs for SHRM. I asked her “What is in this for employers? Is there any financial incentive for employers to participate?” Lisa said that in the current environment of the US, the demand for paid leave and flexible work arrangments has grown to the extent that many states and local jurisdictions have implemented their own laws requiring employers to provide paid time off. As a result, what has been created is a hodge-podge of requirements that create compliance challenges for companies with locations in these jurisdictions. She said the incentive for larger companies or companies with multi-state locations is the reduction of complexity in having to deal with multiple paid leave requirements. Reduced complexity and more consistent requirements generally result in reduced costs to companies. That is one incentive.
I told her that most of my clients are smaller, and generally, Georgia based, where there are no laws requiring paid time off so that hodge-podge situation does not exist. Why would an employer want to now institute a QFWA, I asked. Lisa said that there is a growing movement across the US that is the impetus for this bill. That growing movement could at any time be introduced into the State of Georgia, the City of Atlanta, or any of the county governments. Having the WorkFlex Act available would allow a Georgia based employer, or employers in other such states, to enroll in the program and not have to deal with those local laws. Additionally, a company that abides by the WorkFlex Act could use that as a way to attract talent over companies that do not, given that complying with the Act proves that the company provides ample amounts of paid time off as well as flexible work schedules.
There is, however, no tax incentive to have a QFWA, unlike other ERISA programs.
Criticism of the bill
The primary criticism against the bill seems to center around the misconceived perception that this bill would take away time that other jurisdictions have required. The bill’s paid leave requirements are in fact more generous than all state leave laws. The bill does not restrict how the paid time off can be used, thus it can be used for illness, parental time, vacation, or whatever the employee opts to use it for. In reality, it provides greater protection for paid time off by bringing it under the auspices of ERISA. It does allow employers to deny when time off is taken, given the necessity of the business, but does not allow businesses to reduce the amount of time available to someone.
Will it pass?
Certainly, the trend is that more organizations are realizing the necessity with today’s workforce that more paid time off needs to be provided. Thus, there is an incentive to recognize this need on a federal level. But with today’s divided Congress not all parties may see the need. SHRM is encouraging all its members to get on board in supporting this, but that may take more effort than just a letter campaign. It may take HR professionals meeting with their congressional representatives to convince them.
One of the challenges with this bill is that it is Republican introduced, which makes it “evil” in the minds of many. HR pros will have to argue the merits of the bill for employees and employers to get over the divisive party hurdle. We will have to see what the future holds.